INCOME TAX ACT, 1961

--Income from undisclosed sources--Addition under section 68Genuineness of share application money--Assessee received share application money from four shareholders during the relevant year. Persuant to summons issued to these four persons by AO during enquiry proceedings, two persons appeared before him and denied such investment. In respect of other two, summons were returned back with remark 'incomplete address' and 'no such person' respectively. Assessee, in a reply to show-cause notice issued to it, filed confirmations, receipt of filing income-tax returns and affidavit. AO, being not satisfied with the aforesaid replies/documents made an addition under section 68 on the ground that assessee was not able to substantiate the genuineness of transactions. Held: It was found that the accounts from which those amounts were received as share application money was belonging to one Mr. Aggarwal. One alleged shareholder who appeared before AO had even stated that his signatures on confirmation as well as on affidavit were forged. As per the bank reports, the share application money was received from Mr. Aggarwal through his proprietary concern and thus, transactions were not genuine. Therefore, addition made by AO was justified.

Income Tax Act, 1961, Section 68

IN THE DELHI HIGH COURT

A.K. SIKRI & M.L. MEHTA, JJ.

Beutex India (P) Ltd. v. CIT